It Pays to Be Choosey

Emerging-market stocks had the worst performance last year since 1998's currency crisis. Now there are some good bargains amid the debris.

The latest refrain among money managers is "selectivity" when it comes to emerging markets, after the group's worst performance versus developed markets since 1998.

Yes, 1998—a time when emerging markets were wracked by currency devaluations and economies in chaos. These nations are not in nearly as bad shape today, even in the most vulnerable areas such as Brazil and Indonesia. A more sober view of...